Russia is offering Cyprus cheaper bail-out loans than the EU and IMF,
president Demetris Christofias said on Wednesday, as the country seeks aid
to shore up its ailing banks.

"The conditions offered by Russia are more favourable" because it does not "impose any conditions" and offers "a lower interest rate," Mr Christofias told the European Parliament.

Aid from the EU and International Monetary Fund comes with strict conditions on economic policy as has been the case in Greece, Ireland and Portugal which have all needed bail-outs, while Spain is seeking help for its banks.

Experts from the European Commission, the European Central Bank and the IMF arrived in Cyprus on Tuesday to look into its request for financial aid.

The government has not said how much it is seeking but reports suggest it may need around €10bn ($12.5bn).

Sources told AFP that Cyprus has also been conducting negotiations in parallel with Russia, from which it secured a low-interest €2.5bn-euro loan last year to cover refinancing needs for 2012.

On June 25, Cyprus became the fifth out the 17 countries that share the euro to seek a rescue, seeking funds to save Bank of Cyprus as well as Cyprus Popular Bank from massive losses linked to their holdings of Greek bonds.